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Glossary for
Medicare Part D
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Annuitant
1. A person who receives the benefits of an annuity
or pension.
2. The person upon whom a life-insurance contract is
based.
*Investopedia Says: 1. In other
words, the annuitant is the beneficiary of an
annuity or pension.
2. An annuitant can be the contract holder
or someone else to whom the title was designated.
Proceeds of the contract are given to the
beneficiary upon the annuitant's death in order to
protect the beneficiary from a loss of income. |
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Beneficiary
A person or entity named in a will or financial
contract as the inheritor of property when the
property owner dies.
*Investopedia Says: A
beneficiary can be a spouse, child, charity, or any
entity or person to whom the property owner would
like to leave his or her possessions and assets. |
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Death Benefit
The amount on a life-insurance policy or
pension that is payable to the beneficiary when the
annuitant passes away. Also known as "survivor
benefit".
*Investopedia Says: A death
benefit may be a percentage of the annuitant's
pension. For example, a beneficiary might be
entitled to 65% of the annuitant's monthly
pension. Alternatively, the benefit may be a large
lump-sum payment from a life-insurance policy. The
size and structure of the payment is determined by
the type of policy the annuitant held at the time of
death. |
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Life Insurance
A protection against the loss of income that would
result if the insured passed away. The named
beneficiary receives the proceeds and is thereby
safeguarded from the financial impact of the death
of the insured.
*Investopedia Says: The goal of
life insurance is to provide a measure of financial
security for your family after you die. So, before
purchasing a life insurance policy, you should
consider your financial situation and the standard
of living you want to maintain for your dependents
or survivors. For example, who will be responsible
for your funeral costs and final medical bills?
Would your family have to relocate? Will there be
adequate funds for future or ongoing expenses such
as daycare, mortgage payments and college? It
is prudent to re-evaluate your life insurance
policies annually or when you experience a major
life event like marriage, divorce, the birth or
adoption of a child, or purchase of a major item
such as a house or business. |
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Term Life Insurance
A policy with a set duration limit on the coverage
period. Once the policy is expired, it is up to the
policy owner to decide whether to renew the term
life insurance policy or to let the coverage
terminate. This type of insurance policy
contrasts with permanent life insurance,
whose duration extends until the policy owner
reaches 100 years of age (i.e. death).
*Investopedia Says: These type
of policies provide a stated benefit upon death of
the policy owner, provided that the death occurs
within a specific time period. However, the policy
does not provide any returns beyond the stated
benefit, unlike permanent life insurance policies,
which have a savings component that can be used for
wealth accumulation. |
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Universal Life Insurance
A type of flexible permanent life insurance
offering the low-cost protection of term life
insurance as well as a savings element (like whole
life insurance) which is invested to provide a cash
value buildup. The death benefit, savings element
and premiums can be reviewed and altered as a
policyholder's circumstances change. In addition,
unlike whole life insurance, universal life
insurance allows the policyholder to use the
interest from his or her accumulated savings to help
pay premiums.
*Investopedia Says: Universal
life insurance was created to provide more
flexibility than whole life insurance by allowing
the policy owner to shift money between the
insurance and savings components of the policy.
Premiums, which are variable, are broken down by the
insurance company into insurance and savings,
allowing the policy owner to make adjustments based
on their individual circumstances. For example, if
the savings portion is earning a low return, it can
be used instead of external funds to pay the
premiums. Unlike whole life insurance, universal
life allows the cash value of investments to grow at
a variable rate that is adjusted monthly. |
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Whole Life Insurance Policy
A life insurance contract with
level premiums that has both an insurance and an
investment component. The insurance component pays a
stated amount upon death of the insured. The
investment component accumulates a cash value that
the policyholder can withdraw or borrow against.
*Investopedia Says: As the most
basic form of cash-value life insurance, whole life
insurance is a way to accumulate wealth as regular
premiums pay insurance costs and contribute to
equity growth in a savings account where dividends
or interest is allowed to build-up tax-deferred. |
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Long Term Care
Insurance
(LTC)
Coverage that provides nursing-home care,
home-health care, personal or adult day care usually
for individuals above the age of 65 or with a
chronic or disabling condition that needs constant
supervision. LTC insurance offers more flexibility
and options than many public assistance programs.
*Investopedia Says: Long-term care is
usually very expensive, which is why most people
need insurance. For example, on average, nursing
facilities providing skilled care charge $150
to $300 per day, or over $80,000 a year or more.
Even custodial home care at three visits per week
can cost over $9,000 a year. Most LTC insurance
policies will cover only a specific dollar amount
for each day you spend in a nursing facility or for
each home-care visit. Thus, when considering an LTC
insurance policy, read the policies carefully and
compare the benefits to determine which policy will
best meet your own needs. |
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Medicaid
A joint federal and state program that helps
low-income individuals or families pay for the costs
associated with long-term medical and custodial
care, provided they qualify. Although largely funded
by the federal government, Medicaid is run by the
state where coverage may vary.
*Investopedia Says: In many states, nursing home
stays for non-skilled, custodial care is all that is
covered, meaning staying at home and receiving
medical care is not always an option. In addition,
Medicaid may not be accepted by all nursing homes
nor will it cover recreational activities or any
other forms of non-medical care. However, it does
cover the entire cost for your stay in a facility as
long as you need the care. |
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Medicare
A U.S. federal health program that subsidizes people
who meet one of the following criteria:
1. An individual over the age of 65 who has been a
U.S. citizen or permanent legal resident for five
years.
2. An individual who is disabled and has collected
Social Security for a minimum of two years.
3. An individual who is undergoing dialysis for
kidney failure or who is in need of a kidney
transplant.
4. An individual who has Amyotrophic Lateral
Sclerosis (ALS-Lou Gehrig's disease).
Medicare helps out people at a time in their lives
when they may have serious health problems but lack
the funding for treatment.
*Investopedia Says: Medicare is divided into two
parts. The first part of the coverage encompasses
in-patient hospital, skilled nursing facility, home
health and hospice care. The second part of coverage
encompasses almost all the necessary medical
services (doctors' services, laboratory and x-ray
services, wheelchairs, etc). |
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*Investment
information about life insurance on
Answers.com.
Investopedia Copyright © 2000 by Investopedia
Inc.. Published by Investopedia Inc.. |
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